Bond Market: Turnover Declines by 60%

By Praisebell Rosemond Larbi

Activity on Ghana’s secondary bond market declined sharply over the past week, with total turnover falling by 60.44% week-on-week to GH¢941.11 million, reflecting a slowdown in trading momentum as investors adopt a more cautious stance.

Market data indicates that trading was largely concentrated in the short- to medium-term maturities, commonly referred to as the front-to-belly segment of the yield curve, suggesting a preference for relatively lower-duration instruments.

Mid-Term Bonds Dominate Trading

The 2027–2030 maturities accounted for the largest share of activity, contributing 53.33% of total traded volumes at a weighted-average yield of 11.97%. This was followed closely by the 2031–2034 segment, which made up 46.63% of total turnover and traded at a slightly higher weighted-average yield of 12.49%.

In contrast, investor participation in longer-dated securities remained minimal. Bonds in the 2035–2038 range accounted for just 0.04% of total volumes, with a weighted-average yield of 12.51%, highlighting weak appetite for long-term exposure amid prevailing uncertainties.

Investors Turn Selective

According to Databank Group, the sharp drop in turnover reflects a temporary pause in investor positioning.

“We believe the sharp decline in turnover points to a pause in positioning, with investors remaining selective ahead of clearer signals from the bond market reopening,” the firm noted.

The cautious approach suggests that market participants are awaiting more clarity on macroeconomic conditions, interest rate direction, and potential developments in Ghana’s debt market before committing to larger positions.

Outlook: Gradual Rebound Expected

Despite the recent slowdown, analysts anticipate a modest recovery in trading activity in the coming weeks, particularly as investors rebalance their portfolios toward the end of the month.

The expected pickup will likely depend on evolving market signals, including monetary policy direction, liquidity conditions, and broader economic indicators.

Market Implications

The subdued activity underscores lingering uncertainty in Ghana’s fixed income market, even as yields remain relatively attractive. It also highlights a shift toward shorter and medium-term instruments, as investors seek to manage risk while maintaining returns.

If confidence improves and clearer signals emerge regarding the bond market outlook, trading volumes could gradually rebound. However, in the near term, cautious and selective participation is expected to remain a defining feature of the market.